Statewide lodging tax gets closer to reality

Tourism industry says new revenue is needed to compete in the region

Sandy Newsome, R-Cody, works a morning session in the state House chambers last week in Cheyenne. Newsome favors a new statewide lodging tax that will bring in millions more dollars for the Wyoming Office of Tourism. Supporters say it will allow Wyoming to better compete with neighboring states in attracting visitors.

Lodging taxes are likely to go up if a popular bill is signed into law further funding Wyoming’s Office of Tourism. Surprisingly, the proposed tax is supported by industry insiders.

“We’re in favor of taxing ourselves,” said Claudia Wade, board member for the Wyoming Travel Industry Coalition and executive director of the Park County Travel Council.

House Bill 66, sponsored by the Joint Revenue Committee, calls for a statewide 5 percent tax on lodging, which is assessed in addition to sales tax. Three percent of the lodging tax would go to fund the state Office of Tourism and the other 2 percent would be sent to counties to promote local tourism.

Counties can currently assess an up-to-4 percent lodging tax, subject to voters approving and then renewing the tax every four years.

Park County currently charges a 4 percent tax on lodging. If HB 66 passes the Legislature, local voters would have to approve an additional 2 percent tax to continue funding the Park County Travel Council at the same level, for a total 7 percent tax rate on lodging.

“There is some resistance to additional taxes, but we do not feel 7 percent in Park County is too high,” Wade said.

Big Horn County is one of several counties that do not collect a lodging tax. However, voters in Lovell and Greybull have chosen to impose a 3 percent tax within their towns. As drafted, HB 66 says that cities and towns who are currently collecting a lodging tax will continue to receive “revenue equal to the amount of the [current] tax.”

The measure passed the House last week on a 44-16 vote, with local Reps. David Northrup, R-Powell, Sandy Newsome, R-Cody, and Jamie Flitner, R-Greybull supporting the measure and Rep. Dan Laursen, R-Powell, opposed.

Newsome said the statewide lodging tax would be a great way to assess a tax on out-of-state visitors. “These are the people who use the service of the Wyoming Office of Tourism and the county lodging tax boards,” she said. “Over half of this tax will be paid by visitors in Teton and Park counties. Over 80 percent of this tax will be paid by out-of-state visitors.”

Laursen, however, said the bill should have been amended to completely exempt Wyoming residents from having to pay the additional tax.

“... That is why I voted against it,” he said.

Meanwhile, the portion of the tax sent to the Office of Tourism could boost its budget by more than 50 percent. Had the 3 percent state tax been in place in fiscal year 2018, it would have generated $19.3 million, the office’s executive director, Diane Shober, told the Revenue Committee in November. That’s $6.8 million more than the 2018 budget for the Office of Tourism, which stood at $12.5 million, Shober said.

Wade said the state tourism office has traditionally been funded by the general fund, but “there’s not enough money to go around.”

Wyoming ranks 31st in funding for its state tourism department — far behind other states in the region, Wade said.

“Our regional competition ranks much higher, so we have to do something,” she said.

Montana currently budgets $19 million per year for tourism promotions, Utah $27 million and Colorado $23 million. To the east, Wyoming is slightly ahead of money spent by Nebraska and the Dakotas, Shober said.

“With a thriving economy, people are out and willing to travel. But they have a lot of options before them,” Shober said.

She said the office has seen no growth in revenue since fiscal year of 2009-10, telling lawmakers that the office has the same budget and same number of employees as they did then. Shober also said her office is doing more with less: traffic to the state’s website in 2017 was up 30 percent, partner link traffic was up 20 percent and visitor volume to the state was up 3.2 percent. Meanwhile, revenue in 2017 was up 8.9 percent, coming in at $3.6 billion. (Shober didn’t share 2018 numbers at the meeting because the year still had two months left at the time of the meeting.)

“When people travel to Wyoming, it’s good for all of us,” Shober said.

Having passed the House, HB 66 now awaits action in the Senate. If passed by both bodies and signed into law by Gov. Mark Gordon, the new tax would go into effect Jan 1, 2020.